Mumbai, Oct. 29: Reliance Industries (RIL) — the country’s largest private conglomerate — today reported a 6.4 per cent fall in net profit at Rs 3,852 crore during the second quarter ended September 30 as falling crude prices crimped its refining margins.

Net profit was, however, better than the first quarter number of Rs 3,666 crore, sparking optimism that the worst might be over.

The profit figures — buoyed by reasonably firm margins in its oil and gas production business — were largely in line with analysts’ estimates. The Street was expecting a net profit anywhere between Rs 3,850 crore and Rs 3,900 crore during the quarter.

The gross refining margin (GRM) during the quarter fell sharply to $6 per barrel from $7.50 per barrel in the year-ago quarter. But as always RIL’s gross refining margin was higher than the Singapore regional benchmark of $3.30 per barrel.

GRM is the difference between the value of the petroleum products produced and the crude oil price and is a key performance metric in the oil refining business.

The company announced the results after market hours, but the stock had fallen 1.6 per cent at the close of a skittish trading session to Rs 2,003.85 on the Bombay Stock Exchange.

The research head of a leading brokerage said the stock could rise tomorrow because profits were largely in line with the Street’s estimates, but the courtroom battle over gas supplies with Anil Ambani’s Reliance Natural Resources Ltd could cap the gains.

Refining still the star

Refining continues to be the largest contributor to RIL’s topline, followed by the petrochemicals and the oil and gas exploration business.

During the second quarter, the refining and marketing business generated revenues of Rs 39,564 crore, a growth of nearly 9 per cent from Rs 36,316 crore in the corresponding period last year.

RIL said the Jamnagar refinery processed 27.63 million tonnes of crude compared with 16.34 million tonnes processed in the same period last year.

During the period, RIL’s turnover jumped a little over 6 per cent to Rs 48,843 crore against Rs 46,014 crore in the same period last year. This was placed at Rs 78,035 crore (Rs 86,201 crore) for the half year ended September 30.

However, other income spurted to Rs 628 crore for the quarter against Rs 151 crore a year ago.

RIL said other income jumped because of a higher interest income on account of higher cash and cash equivalents, which were put at Rs 19,421 crore.

Net capital expenditure on projects was placed at Rs 7,831 crore for the quarter.

Revenues from the oil and gas business surged to Rs 2,937 crore during the quarter against Rs 935 crore last year.

The company said gas production from KG-D6 had been ramped up to over 40 million metric standard cubic metres per day — the fastest ramp up in gas production among the world’s deepwater gasfields.

Natural gas from the block was supplied to 15 fertiliser, 19 power, three steel, one LPG and two city distribution companies.

The petrochemicals business, however, saw a drop in revenues for the quarter at Rs 13,340 crore (Rs 15,548 crore).